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Ousted Ornge CEO Chris Mazza spun a tale of pure fiction when he claimed he would have changed course at Ontario's troubled air ambulance service if the government asked him to, Health Minister Deb Matthews charged Tuesday.

Mazza testified earlier that had he been asked to make any changes of any kind at any time, his answer would have been, "Yes, ma'am."

That's "pure nonsense," Matthews told a legislative committee.

Mazza's defence for the scandal that's engulfed Ornge doesn't hold water, she said. The former CEO refused to disclose his "outrageous" $1.4-million compensation package even though other senior managers voluntarily complied, she said.

He stonewalled the auditor general and "manipulated" patient transfer numbers in reports to her ministry, Matthews said.

Mazza also avoided two opportunities to meet with her, Matthews said, then he told the committee that she wouldn't meet with him.

"I think we can agree, that was not a 'Yes, ma'am,' but it was a message received loud and clear, and it led directly down a path that ended with the complete overhaul of leadership at Ornge," she said.

"I operate under no illusion that had Chris Mazza met with me, that he would have been forthcoming about his actions."

The minister had testified in March that she was unable to rein in the publicly funded organization sooner and unaware of numerous red flags about a web of for-profit companies Ornge had set up to generate revenue.

Ornge, which receives about $150 million a year from the province, is under a criminal probe for financial irregularities. It's been under fire for months over a litany of issues, from exorbitant salaries and questionable business deals to staffing shortages and poorly designed medical interiors in its brand-new helicopters.

But the minister's version of events was challenged by Mazza during his emotional appearance nearly two weeks ago. He said the health ministry always knew about the changes he was making at Ornge and never told him he had veered off course.

Matthews acknowledged Tuesday that Ornge did share some information with her, but said she was misled about what they were actually doing. It also hid many of its "unsavoury practices" from the ministry, she said.

The opposition parties also questioned Matthew's account, saying there were too many alarm bells for the health ministry to be unaware of what was brewing at Ornge.

"You had the power to act all along, but you chose to act after it hit the front page of the paper," said NDP health critic France Gelinas.

Even if Matthews didn't know Mazza's salary, she should have become suspicious when it disappeared from the annual list of public service workers earning more than $100,000 back in 2009, the NDP said. And she should have forced Ornge to cough up the information when they refused to disclose it.

In a confidential letter last year that was meant for the minister, senior health bureaucrats were also warned about Ornge's business dealings and a $300-million bond issue, said Progressive Conservative Frank Klees.

The letter, written by bureaucrats who examined Ornge's financial statements, raised concerns about Ornge lending millions of public dollars, the potential transfer of other taxpayer funds outside the province and the purchase of a building that was leased back to the publicly funded organization.

Auditor general Jim McCarter reported the building was bought by one of Ornge's for-profit entities, which leased it to the public organization at a rate that was 40 per cent higher than fair-market rent. That allowed the subsidiary to obtain $24 million in financing for the building.

He has criticized the governing Liberals for failing to oversee Ornge, despite giving it $730 million over five years and allowing it to borrow another $300 million.

Matthews said she never saw the letter that Klees tabled Tuesday, but defended the bureaucrats to whom it appeared to have been sent.

When she returned for another round of questioning, she called it a "fizzled bombshell" from Klees.

Even though the letter was marked "Confidential Advice to Minister," it was meant for senior ministry officials in preparation for McCarter's report on Ornge and "never intended for me personally, as a minister, to see," she said.

But Matthews changed her tone when Klees produced another letter received by a man who lost his wife after a four-hour wait for an air ambulance. The letter from Ornge was addressed to his late wife, asking for her feedback "on the care and service" she recently received during her air ambulance transport.

It was signed by Ornge's current CEO Ron McKerlie, who called Clyde Dearman after his wife's death in May to apologize.

Keeping track of patients who died should be "pretty basic for an organization that draws down $150 million of taxpayers' money," Klees said.

Matthews called the letter "inexcusable" and promised to apologize to Dearman.

As their exchanges grew more heated, Klees demanded that Matthews resign.

"You fired Mazza, you fired the board, it's time to fire yourself," he said. "You failed the people of Ontario and you know it."

But Matthews insists the main problem at Ornge was the executives and board of directors who were replaced in January.

"The problem was the leadership at Ornge was more interested in what Ornge could do for them than what they could do for the patients of this province," she said.

It wasn't unusual for Ornge to hire family members of its employees, said Rhoda Beecher, former vice-president of human resources.

"It in fact was encouraged," she said.

Three women whose hirings have come under scrutiny — chairman Rainer Beltzner's daughter, Mazza's girlfriend and Beecher's own daughter — all went through a "rigorous" hiring process, she said.

She had nothing to do with the hiring of her daughter and discouraged her from applying, she said.

However, Beecher said she was hired by Mazza without having to compete for the job. She is now a claimant in the bankruptcy of two of Ornge's for-profit companies, saying she's owed $50,000 in salary.

Liberal David Zimmer wasn't convinced that everything was above board.

"Would you not agree that, for a reasonable person from the outside, that looks a bit like some pretty heavy-duty nepotism?" he said.

"The senior managers — the CEO, the chair of the board, the vice-president of HR for Ornge — have all got their girlfriends or children working there, at a publicly funded organization."

Beecher disputed that, saying Mazza told her that he was a friend of Kelly Long, a former waterski instructor, when Long was hired. He also informed her when he separated from his wife and started a personal relationship with Long, who rose to the rank of junior executive.

The committee also heard from front-line workers who described their frustration with staff shortages and delayed responses to emergency calls, saying it put patients at risk.

Brandon Doneff, a critical care flight paramedic at Ornge, said medics and pilots voiced their concerns to Ornge management during Mazza's tenure, but it was like hitting "a brick wall."

He was told that the so-called "downstaffing" and delays were meant to help Ornge save money, he said.

Ornge executives told front-line staff a year ago that they were running out of money and would have to close bases in Ontario, he said. Even though there wasn't enough money to provide adequate services in Ontario, they said they had a plan to expand the organization's reach internationally, Doneff added.

The committee will hear from a number of other witnesses over the next two days, then break for the summer.

It had so many questions for Matthews, she had to turn her car around while on her way to London and return to the legislature for more questioning.

Klees said he's added Premier Dalton McGuinty to the witness list, but the committee won't be able to meet again until the fall.

The opposition parties said they wanted to recall Mazza too, but his doctors have sent a letter saying he is medically unfit to testify.